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Speaker 1: This is the business of sports. Let's talk Super Bowl

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Speaker 1: and Fox Sports every single thing that occurs. I want

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Speaker 1: people to remember, this is a business. Guaranteed money isn't

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Speaker 1: necessarily guaranteed. Michael Ball. How high can these valuations go?

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Speaker 1: Scott Duke, everybody loves rooting against him, right. Evan Williams

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Speaker 1: Off the field, the NBA has never been buzzier. And

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Speaker 1: the leaders in the sports industry Major League Baseball Commissioner

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Speaker 1: Rob Manfredd Micha Riscoe is the commissioner of the American

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Speaker 1: Athletic Conferest. Here In Smith, President of Ticketmasters in the

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Speaker 1: Race card driver Elio Castro, and Evs Bloomberg Business of

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Speaker 1: Sports from Bloomberg Radio. Hello, I'm Scott, I'm Evan, Novie Williams,

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Speaker 1: and I'm Michael barn This is the Bloomberg Business of

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Speaker 1: Sports podcast, where we explore the big money issues in

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Speaker 1: the world of sports. We have two major topics, but

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Speaker 1: let's start first of all with NFL labor. They have

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Speaker 1: come to an agreement, but there are a lot of questions. Scott,

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Speaker 1: this thing only passed by sixty votes. Yeah, one thousand

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Speaker 1: and nineteen to nine de nine, with a whole lot

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Speaker 1: of players sitting it out, which I don't understand why

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Speaker 1: any player, and I know there's a lot going on

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Speaker 1: in the world, but you did have plenty of time

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Speaker 1: to vote. A lot of guys just stood on the sideline.

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Speaker 1: It would worry me if I'm Demorris Smith or if

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Speaker 1: I'm any member of that union that an agreement with

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Speaker 1: this much importance and this many implications barely passed because

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Speaker 1: anything that happens in the future, and whether it's a

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Speaker 1: disciplinary case or any or any any sort of problem,

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Speaker 1: you're gonna have a whole bunch of players saying this

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Speaker 1: is why we voted against it, and there might be

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Speaker 1: a better way in the future. Because this just needed

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Speaker 1: a simple majority to pass, So it's plus one to

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Speaker 1: pass perhaps in the future, because there is so much

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Speaker 1: right on this and we're talking and I'm sure we'll

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Speaker 1: get into with TV deals and the like and and

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Speaker 1: penalties and compensation because there's so much writing on this,

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Speaker 1: maybe a two thirds majority would be a better idea.

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Speaker 1: And to your point, Scott, you know, the most vocal players,

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Speaker 1: the stars in the league, were the ones who were

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Speaker 1: the most vocal against this deal happening, whether it's you know,

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Speaker 1: Richard Sherman, Russell Wilson, Aaron Rodgers, J. J. Watt, you know,

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Speaker 1: the biggest voices in the league didn't want this to pass.

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Speaker 1: And the reason it did, or one of the main

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Speaker 1: reasons it did. The minimum salary for the NFL that

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Speaker 1: went up a hundred thousand dollars and we'll go up

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Speaker 1: almost five hundred thousand dollars over the next few years.

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Speaker 1: More than six NFL players make league minimum, you know,

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Speaker 1: so as long as you can get all the league

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Speaker 1: minimum people to vote yes on this, which you know,

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Speaker 1: my guess is there was an overwhelming majority of them.

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Speaker 1: Who did you know, then the stakeholders like Aaron Rodgers

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Speaker 1: and J. J. Watt, you know, their vote gets diluted,

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Speaker 1: you know. So one of the reasons I think this

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Speaker 1: thing passed is because, you know, the financial benefits for

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Speaker 1: the people who make the least were so high, but

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Speaker 1: they are the least vocal when it comes to kind

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Speaker 1: of day to day operations and what the fans think

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Speaker 1: about when they think about the league. Well, the thing

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Speaker 1: that I am it bothers me is that it wasn't

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Speaker 1: just a few, it wasn't just a hundred. We're talking

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Speaker 1: over around five hundred players that did not vote for this.

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Speaker 1: So if things go south down the road ten years

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Speaker 1: from now or even five years from now, how can

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Speaker 1: these players say anything? You know? I mean I and

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Speaker 1: I think you and I would agree. One of the pieces,

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Speaker 1: uh that drew criticism is the length of the contract.

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Speaker 1: In today's world with the rapid change, to do a

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Speaker 1: ten year deal without any reopeners, without any opt outs,

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Speaker 1: why not do to three? I mean, and I know

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Speaker 1: why the NFL wants it. The NFL wanted this deal

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Speaker 1: done because they are embarking on new media deals and

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Speaker 1: we have had some folks like Lee Burke into the

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Speaker 1: program tell us that they could double their hall in

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Speaker 1: media contracts because it's just such must have programming and

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Speaker 1: you don't want to negotiate those deals in a backdrop

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Speaker 1: of labor uncertainty. That's out of the way. But ten years, boy,

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Speaker 1: if you do find something that doesn't work for your side,

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Speaker 1: or there is some tweak you wish you you're done.

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Speaker 1: I mean, you're committed for a decade in a sport

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Speaker 1: where the average length of a career is only about

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Speaker 1: three years. So that, I mean, I think that explains

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Speaker 1: the the folks who didn't participate, or the I want

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Speaker 1: to get my now nature of this whole negotiation. It

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Speaker 1: is very hard to get the rank and file of

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Speaker 1: the NFL to think about other groups, and that whether

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Speaker 1: it's retirees or incoming rookies we've seen in the past,

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Speaker 1: those are the two groups that are easiest to not

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Speaker 1: care about because they're technically not in your union right now.

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Speaker 1: So uh, well, we'll see where this progresses. But the

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Speaker 1: grab of I want mine now, uh could have some

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Speaker 1: long term implications some other big you know things that

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Speaker 1: happened in this deal, which we've talked about before. But

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Speaker 1: the NFL will will expand to a seventeen game regular

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Speaker 1: season starting not this season, but the one after that.

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Speaker 1: The playoffs will get wider also, from twelve teams to fourteen.

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Speaker 1: That will happen uh this season in and Scott as

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Speaker 1: you talk about you know, ten years down the line

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Speaker 1: or potential you know, conversations in that span, the players

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Speaker 1: have essentially lost their their one big bargaining chip right

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Speaker 1: the seventeenth game, which a lot of people were outspoken about. Um,

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Speaker 1: that was kind of the one thing the players had

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Speaker 1: in this uh. And now you know, as you move forward,

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Speaker 1: that's gone. I'm curious if you think, because because we

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Speaker 1: saw a couple of weeks ago, you know, there was

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Speaker 1: a story out there NFL owner is not happy with

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Speaker 1: this deal, kind of want an eighteenth regular season game.

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Speaker 1: I'm curious if you think in in four or five years,

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Speaker 1: the players will have another bargaining chip and that will

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Speaker 1: be the eighteenth regular season game. Uh. In the middle

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Speaker 1: of this deal, it depending on what the media contracts

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Speaker 1: look like. Yeah, what what do they need? What are

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Speaker 1: the bidders and when we're looking next time? Right? I

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Speaker 1: think you and I agree, and I think the industry

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Speaker 1: agrees that for the most part, it will be the

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Speaker 1: traditional linear broadcast networks that dominate. This round of negotiations

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Speaker 1: will have some participation from the tech companies and the fangs,

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Speaker 1: but the one after that is going to have a

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Speaker 1: markedly different look. The technology will be better, UH, streaming

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Speaker 1: numbers will continue to sore, The ability to direct advertise

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Speaker 1: and data will matter more. At that point, what do

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Speaker 1: those companies need and what are they willing to pay for?

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Speaker 1: How personal will the O t T s look? You know,

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Speaker 1: whether it's a betting O T T I don't know,

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Speaker 1: but surely the ability to add more of the live content,

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Speaker 1: which in the NFL seems to be the real driver

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Speaker 1: unlike some other sports. And well we'll talking about your

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Speaker 1: your NBA take future shows, but the one where you

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Speaker 1: admitted you were possibly wrong, Um possibly, but yeah possibly,

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Speaker 1: I don't want to say you committed to it. Uh.

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Speaker 1: But yeah, more games, more inventory, more money. I mean

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Speaker 1: that that's just the simple man here, that that's what

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Speaker 1: the NFL can do. They can add games and then

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Speaker 1: slice and dice packages and get more money from more bidders.

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Speaker 1: I mean, it's it's a simple formula. I thought that

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Speaker 1: before we move on, I thought that the extra playoff,

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Speaker 1: two extra teams in the playoffs, that wasn't gonna happen

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Speaker 1: until maybe one but they're the chance it could happen

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Speaker 1: this upcoming season. Yeah. And and one kind of one

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Speaker 1: more question to think about as we transition into into

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Speaker 1: the other major story in sports right now. The coronavirus

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Speaker 1: and the slowdown of US sports has hit media companies

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Speaker 1: I think fairly significantly and will continue to. You know,

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Speaker 1: CBS lost one of its most important sports pieces, the

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Speaker 1: n c A tournament. NBC is losing golf. You know,

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Speaker 1: Fox is losing things as well, ESPN obviously losing a

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Speaker 1: ton of content. Do you think that the financial ramifications

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Speaker 1: of this slowdown might actually affect the amount of money

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Speaker 1: the the NFL can can pry out of them in

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Speaker 1: the next round of labor talks. You know, six point

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Speaker 1: five billion dollars a year is roughly what the NFL

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Speaker 1: gets right now from its TV partners. Do you think

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Speaker 1: there is a potentially long term effect and on the

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Speaker 1: business for for those partners moving forward as a result

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Speaker 1: of this, and may result in being able to offer

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Speaker 1: less I'd say no, Evan, because there have been shutdowns before,

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Speaker 1: there are givebacks, there are make goods. The NFL can

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Speaker 1: still dictate because it's the eight hundred and fifty pound gorilla.

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Speaker 1: It is the most reliable eyeball draw in television. That

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Speaker 1: will not change because of it. If anything, you have

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Speaker 1: to imagine the thirst for sports when these leagues do

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Speaker 1: come back online and by the way, coming back at

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Speaker 1: a pivotal time their playoffs. Uh, you're gonna I think

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Speaker 1: you're gonna see a lot of eyeballs confirming the need

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Speaker 1: and value for this program. Well, NFL is king Kong

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Speaker 1: at the front door to use to quote Steve Coonan, Yeah,

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Speaker 1: that's true. There you go. Yeah, and and yes is

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Speaker 1: the pound guerilla in the forest. But with this coronavirus,

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Speaker 1: and I'm not being funny, the forest is on fire

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Speaker 1: because there's nothing out there now. And and we don't

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Speaker 1: know when they're going to come back. The NBA is

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Speaker 1: talking about maybe Adam Silver, maybe around June. I mean,

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Speaker 1: we can go on there. There's a question if they're

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Speaker 1: going to run the Kentucky Derby, move it back a

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Speaker 1: couple of months. I mean, I can go on and on.

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Speaker 1: And I gotta tell you, we were talking about the

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Speaker 1: Tokyo Olympics. I do not see now how in the

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Speaker 1: world when you bring the entire world together, and that's

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Speaker 1: what you're trying to avoid from this virus, how are

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Speaker 1: you going to hold the Olympics? Barry? I mean, you're

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Speaker 1: right on. It's just a lot of uncertainty. But you

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Speaker 1: saw the steps the leagues were taking, and it really

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Speaker 1: indicates the value of the TV. The first thing the

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Speaker 1: leagues wanted to do was play games and empty arenas well.

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Speaker 1: Why because they could sacrifice the gate revenue and the

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Speaker 1: concessions and the per cap because they were getting their

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Speaker 1: TV money. So in a world where we just don't know. Um,

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Speaker 1: you saw Mark Cubans say, yeah, maybe we'll pay in

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Speaker 1: We'll play in jun June, July, August. I mean, at

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Speaker 1: some point these leagues will be able to return. It's

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Speaker 1: just a matter of what can you do. Are the

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Speaker 1: players ready to play? What kind of warm up and

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Speaker 1: training camp to then what is feasible? Um? And it's

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Speaker 1: too to tell. And the Olympics are in the same thing.

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Speaker 1: And it's been covers that more closely than I do. Um,

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Speaker 1: you had one member of the local organizing committee say

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Speaker 1: we're thinking about postponement. And let's just say that person

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Speaker 1: got added down pretty quickly, right Evan. Yeah, that's true,

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Speaker 1: and and and you're absolutely right, Michael. And it goes

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Speaker 1: to what I think is kind of a larger point

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Speaker 1: that I feel right now. I still don't think that

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Speaker 1: the league's kind of written large are listening fully, at

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Speaker 1: least publicly. The things they're saying are not jibing with

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Speaker 1: the things that scientists are saying. I mean, the idea

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Speaker 1: that in in thirty days basketball or hockey can continue

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Speaker 1: seems highly unlikely. When the CDC is out there saying

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Speaker 1: gatherings of fifty or more people can't happen for the

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Speaker 1: next two months. You know, a lot of these leagues, Golf, Tennis, Nascar,

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Speaker 1: a lot of these, you know, governing bodies have canceled

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Speaker 1: just a few weeks of events. You know, if that

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Speaker 1: and and Michael as you know, you know how many people,

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Speaker 1: if you take even fans out, how many people are

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Speaker 1: working at a NASCAR event, between pit crew, drivers, scouts,

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Speaker 1: whole things. You know, it's hundreds of people. Right, So

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Speaker 1: if the CDC is out there saying for two weeks

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Speaker 1: gatherings of fifty people can't happen, you know, a hockey game,

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Speaker 1: you know, just the rosters alone is almost fifty people

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Speaker 1: at at an NHL game. So I do think we're

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Speaker 1: looking at a much longer period than maybe some of

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Speaker 1: these sports things are at least publicly willing to admit.

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Speaker 1: Right now, and real quick. On the Olympics, I mean,

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Speaker 1: I think you're absolutely right. The weirdest thing to me

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Speaker 1: about what the IOC is doing is that they are

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Speaker 1: unwilling to even entertain the idea publicly that that the

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Speaker 1: games may get postponed or canceled, which I think is

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Speaker 1: is potentially detrimental to athletes around the world who are

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Speaker 1: trying to figure out what's realistic and what isn't UM.

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Speaker 1: But you know, leagues here in the US have been

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Speaker 1: at least talking about the virus for for for weeks now,

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Speaker 1: if not months, and the potential changes it might have.

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Speaker 1: The IOC and the local Japanese host committee in Tokyo

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Speaker 1: are essentially saying that they have not even considered any

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Speaker 1: other opportunities UM, which one I don't particularly believe, but

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Speaker 1: to you know, I think it would be more you know,

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Speaker 1: beneficial if they were at least open to it, to

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Speaker 1: discussing maybe things that were on their mind bar those

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Speaker 1: are like, you know, these are top line issues. We

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Speaker 1: haven't even talked about things like UM arena debt and yeah,

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Speaker 1: I mean you need you need the revenue streams to

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Speaker 1: pay back the debt on these buildings, and that that's

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Speaker 1: part of it. We We've talked to some about insurance

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Speaker 1: companies and we're not sure we know what the leagues

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Speaker 1: have with the players unions, can it how much can

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Speaker 1: it cover if they're not played. Some of these are

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Speaker 1: publicly traded companies that need the event. So it's just

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Speaker 1: it's just an unprecedented situation and we're just not sure

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Speaker 1: where it's going to ahead yet. I have never seen

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Speaker 1: anything in terms of just everything shut down. I mean, yes,

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Speaker 1: when eleven happened, we had that happened before, but we

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Speaker 1: knew there was gonna be a period of morning and

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Speaker 1: then things we're gonna restart. When it comes to this,

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Speaker 1: we don't know when this is going to pick up,

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Speaker 1: and and and we even with gambling, it's like, you know,

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Speaker 1: if you don't have a sports betting room, you have

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Speaker 1: no sports in there, how are you going to bet?

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Speaker 1: And now you've got casinos in Las Vegas they're shutting down.

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Speaker 1: I mean this, this is a mess. I spent some

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Speaker 1: time I'm in New Jersey over the weekend and DraftKings

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Speaker 1: was pushing both Daily Fantasy on the Democratic debate. You

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Speaker 1: know how many times Joe Biden would say the word Trump, etcetera.

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Speaker 1: And also pushing their blackjack product um obviously because there's

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Speaker 1: not much to bet on, as you said, but but

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Speaker 1: they can still people can still gamble online. So yes,

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Speaker 1: I mean, no question, sports gambling companies, uh not in

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Speaker 1: a good place right now. Ticketing companies, you know, if

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Speaker 1: you're if your revenue relies on people buying tickets to concerts,

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Speaker 1: broadway shows or sporting events. You know, obviously things are

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Speaker 1: not good right now, Scott, you mentioned stadium dat stadium construction.

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Speaker 1: You know, we have two multibillion dollar stadiums in the

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Speaker 1: NFL that are set to open, supposed to open this

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Speaker 1: fall for NFL season. UM, I would think there's a

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Speaker 1: decent chance that construction on on both of those gets

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Speaker 1: gets changed timeline wise. As a remolt about yeah, you

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Speaker 1: got to mention, we're talking about the six billion dollar

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Speaker 1: stadiums Stan Cronkies building in l an Allegian Stadium in

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Speaker 1: Las Vegas. What what if construction has to stop exactly? Yeah,

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Speaker 1: that where do they play? Just the trickle down questions

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Speaker 1: we have the answers, that's the problem. We're not suggested

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Speaker 1: with any answers out. We are just pointing out though

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Speaker 1: there are married questions that are keeping commissioners, owners, executives

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Speaker 1: up at night. And I'll say it again, one Big

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Speaker 1: time sports executive told me that the entire leadership team

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Speaker 1: of the franchise is spending of its time on Corona

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Speaker 1: related issues. My guess since he said that comment, we're

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Speaker 1: probably up. Yeah, that's probably a little a little higher now.

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Speaker 1: One other one to toss out there, E sports. I

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Speaker 1: think that, you know, there's a big opportunity here for

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Speaker 1: professional video gaming in a world in which there's no

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Speaker 1: traditional sports out there. And and as we talk about,

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Speaker 1: you know, networks that might need content, sports bettors that

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Speaker 1: might need something, uh to satisfy their their itch to

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Speaker 1: gamble fans out there who are just looking to watch

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Speaker 1: competition as well, a lot of these big E sports

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Speaker 1: leagues are shifting their capacities to go online only and

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Speaker 1: they will be able to have competitions. And I do

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Speaker 1: think that you're going to start to see as networks

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Speaker 1: like ESPN and Fox start to figure out, okay, what

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Speaker 1: are we actually doing with programming? How long might this last?

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Speaker 1: I do think there may be a push and a

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Speaker 1: drive of more sports fans finding the sports now that

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Speaker 1: they're just running out of other things to watch and

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Speaker 1: to do. Gambling companies should send their their customer lists

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Speaker 1: to the sports companies. We should buy those lists who

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Speaker 1: thought it would be smart, Like my fifteen year old

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Speaker 1: would now be the expert in this with the sports.

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Speaker 1: It's it's amazing, he's your tout. Yeah, he's my tout. Yeah,

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Speaker 1: this has been the Bloomberg Business with Sports podcast. I'm

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Speaker 1: Michael bar along with Scott Sashnik and Evan and ly Williams.

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Speaker 1: We are here and when I say here, that's Evans

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Speaker 1: at his place assignment. My plays Bar. You're at the

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Speaker 1: command center. Good for you. But we do this every Monday,

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Speaker 1: Wednesday and Thursday exploring the world of money and sports.

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Speaker 1: Join us again at the end of the week when

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Speaker 1: we speak with the biggest and the bright in the

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Speaker 1: sports business world. You're listening to Bloomberg Business of Sports

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Speaker 1: on Bloomberg Radio around the world and online wherever you

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Speaker 1: get your podcasts. M